Why New York's Rules on Non-Competes Don't Apply to Lawyers

Granted, from the title of this article it would seem that New York's lawyers are just taking care of themselves.

But in this instance, it's not true. Strange as it may sound, the underlying rationale is to protect the clients.

While partners in a law firm owe a fiduciary obligation to their fellow partners, they have a competing fiduciary obligation to their clients. The Court of Appeals acknowledged that when a partner chooses to leave the law practice, charting the best course is often murky, stating:

"It is unquestionably difficult to draw hard lines defining lawyers' fiduciary duty to partners and their fiduciary duty to clients. That there may be overlap, tension, even conflict between the two spheres is underscored by the spate of literature concerning the current revolving door law firm culture."

One of the main reasons for this is that, with few exceptions, clients have an unfettered right to choose whatever lawyer they want for their legal needs. Thus, to the extent a law firm's non-compete agreement hampers a client's ability to follow the lawyer of its choice, those agreements will likely be held unenforceable as a matter of New York law.

As one respected commentator noted, "[T]he public policy favoring client freedom of choice in legal representation should override the firm's proprietary interest in holding its clientele.”